Which works qualify for the copyright tax regime?

Within your company, both directors and employees create presentations, drafts, sketches, newsletters, brochures, and so on. Once these works result from the author's free creative choices, they are considered copyrighted works. This is a low-level requirement.

Both international treaties and the Belgian Economic Law Code emphasize that the concept of "work" should be interpreted broadly. The term therefore includes books, brochures and other writings; lectures, courses, trainings, speeches, sermons; drawings, sketches and plastic works relating to geography, topography, architecture or the sciences; computer programs, databases and machine manuals.  

Only a natural person can be the author of a work; a legal person must acquire the copyright. If the company wants to exploit, communicate or reproduce these works, it always needs prior authorization from the author. Thus, the author can transfer or license his property rights to the company through an agreement. From the perspective of Belgian personal income tax, it is particularly interesting to compensate the author for this transfer. This can be based on a percentage of the turnover, remuneration or a lump sum. The income you obtain as an author from this transfer or license qualifies as "movable income" and, in principle, not as remuneration taxed in accordance with the progressive income tax (up to 50%).

How to calculate the taxation on copyright remunerations

To qualify as movable income, the fees may not exceed EUR € 64.070 (fiscal year 2023) per tax year. The tax rate applied to this movable income is only 15% after deduction of flat-rate expenses when it does not exceed these maximum amounts. The author is entitled to deduct the flat-rate expenses from the movable income. The withholding tax can be retained by the company.

For example, the taxation of a remuneration of 20.000 EUR for the transfer of - or license to copyrighted works is calculated as follows:  

• 50% on the tranche from 0 EUR to 17.090 EUR = - 8.545 EUR
• 25% on the second tranche from 17.090 EUR to 34.170 EUR = - 727,50 EUR
• Withholding tax of 15%= - 1.609,13 EUR

With a remuneration of 20.0000 EUR, the movable net income of the author will be 16.939,87 EUR.

How to implement the copyright tax regime

It is essential to choose a market-based remuneration. In case of uncertainty, a ruling can be requested with the tax authorities. The tax authorities will then assess the intended transaction by taking into account the intended works, the capacity of the author(s) and financial situation of the applicant. If you wish to apply for a ruling, we guide you through the pre-filing process in order to verify certain matters without these entering your tax file. We draft the application, handle all communication with the ruling committee and handle the entire procedure so that you obtain legal certainty about the application of the regime.

We have created a complete database of all copyright rulings. Using this database, we optimize the intended remuneration in accordance with your activities, works and figures. To support the transaction, we prepare the (legally required) documents such as the transfer or license agreement and any legally required reports depending on the applicant's corporate form.

In addition, we assist you in dealing with any inquiries from the tax authorities or appeals related to the treatment of the copyright tax regime.